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Don't pay the prepay. Your reset rate in October may be no worse than you are paying now, and could possibly be better.
Tom O'Leary
Countywide does offer no cost refinancing but check for a larger than par rate...that is used to pay the third party fees. You should wait for the pre pay to expire because you are very close at this point in time. If inflation appears to be contained then we could be in a better interest rate environment in October 2008. With FHA mortgage insurance can be a negative to some people but you can deduct this cost on your taxes for the next three years.
Ron Aguilar
Having been in the mortgage industry since 1979, I have seen, talked about and heard everything that can, does and will happen. I do mortgages for a living and my focus has always been doing what is in the best interest of anyone I have the privilege of meeting and communicating with.
Having said that, my advice is this: Do nothing. Save your money. That one broker trying to convince you to do a loan does not have your best interest in mind.
Tom O'Leary answered your question perfectly. Kudos to him.
Rest easy any DO NOT listen to anyone else! Thank you and good luck.
If you do have any other questions please call me or email me anytime. My toll-free nationwide 800 # is: 1-800MyMoney (1-800-696-6639)
WAIT IT OUT!!!!!!
Been doing this long ago to know I do not have enough info to answer but I need to put in my two cents.
1. As far as Countrywide goes I did a blog last week that exposes "no cost." Read the fine print and you will find the cost.
2. As far as refinancing you really need to find out what your market is doing. Now I hope it is picking up now but this can hurt you in October. You state that your market is going down and with new sales these will be your comparables in October.
Now you should be able to do the 97% FHA refi in October but you might be flirting with value.
You know what you have now. October is a gamble. I will not tell you to do it or not but you really need to find out what homes are selling for right now in your area. That way you can decide.
Thanks
Tony
Featured Rates are based on state rates for 5/1 ARM loans and are valid for the date shown, but they may change without notice. They are for consumers with a credit rating of 720 or higher and a 20% or higher down payment. Rate, terms, pre-paid finance charges, and APR may vary based on factors such as creditworthiness of the applicant(s), self employment status of the applicant(s), condo or townhouse structure, loan amount, and geographic location of the property.
If a lender does not offer a national rate, a state rate may be shown next to the lender's name. For example, 'Bank name (CA)'.
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Interest only w/9k prepayment penalty resets in Oct Refi now or wait
mrgdonovan
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I am trying to decide on doing a refi on my interest only loan that will reset in Oct. I owe 335k and the last appraisal in January came in at 350k.
Prices have declined slightly. The prepayment penalty is 8900 and will expire in Oct when the rate resets. One broker has offered to build costs
into the loan for a new loan at 446k with 13k cash down which would include the prepayment penalty and 4k of pmi upfront with a 130 dollar a month
pmi payment. this is an fha loan. The house is in Utah. FICO is 678. I am considering waiting until the prepay expires and paying down a credit card that would help my fico by bringing it down to 35% debt to available credit. Loan is with Countrywide and they are telling me they can do
a no cash out refi in Oct if house still has enough value. Any advice would be appreciated.
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